out as investors are optimistic. raising the debt ceiling and reopening the government. also strong today, 45 points higher on the nasdaq. my observation returns tomorrow. i hope you will join me for that. >> live from the new york market site, investors and business leaders are looking for answers right now on capital hill where a vote could come at any moment. >> republican opposition in any

serious way has collapsed to this bipartisan deal that harry reid and mitch mcconnel have negotiated. blocking the senate deal will not be a tactic for us. the result of that is that that deal is expected to come to a vote in the senate around 6:00 p.m., about one hour from now. and keep it open through january 15. raise the debt limit to february the 7. that vote is expected to get 80 plus votes in the senate. then it will go to the house. we will avert this nightmarish lurj towards the debt ceiling which we have been on for the last several weeks. >> thanks for your update. stocks reacting quickly to that announced deal. with the dow and s&p 500 rising

the nasdaq hitting a 13 year high. >> i don't think it's going to be a long-lived event. the things that will continue to work to me are the things that you were buying five days ago. i think you're going to get a bounce. it doesn't last that long. then i think 1620 comes into play. it made sense to have a radical shift. every time you tried to play that game you probably lost. you would rather be long than short. >> so now that we have a deal, how are you trading it? is it off to the races until the end of the year? some could argue that this is the perfect set up. >> this is so tough. i could make both cases. i could say look, it's a debt deal. that's the top. or i could say this is the last

tackle and we have broken it. had a great start. typically we finish strong when that happens. and what are you selling for if there is not going to be a violation of the debt ceiling. what is your valuation? so, it's really tough but i think if you have to err on one side or the other, i think you want to think about the market finishing strong and how can you do the best? >> the other point to keep in mind is that the position is the highest since january here. so we could be spring loaded going into the final few months of the year. >> if you look at the underpositioning, i still think miners, metals and some of the industrials. if you look at the brept of this rally, it has been apparently over the last 23 years this is the broadest rally we have had. i think there is more room to go. when you look, if we get through

this, then we have no fed in our way and the ecb if anything is worried about trying to reflat their economy, i don't think there is anything standing in your way. but i see indigestion this week and i think we can build towards the next year. >> isn't that typical? >> we have also had syria, taper talks, budget, we have had shut down and debt ceiling. none of that has killed the marketplace. it still is err on the side of higher markets. >> it is sort of overridden and overshadowed an earnings story. if you are missing on the revenue line, people don't even care about the beat. >> that's the point. my premise was we're going to rally on the back of this.

we got there. then it becomes an earnings story. now let's see what happens you can't say that about tech on the whole or the whole s&p. ibm is down two and a half percent on the year. so to use it as a reason to say the rally is over. >> i think the bigger point is that money really rotated and people wanted to stay clear of this. now if this is seen as the -- >> the one that we are getting rotated out of? >> money market funds are rotated out of it. >> people are taking their money out of the marketplace and putting it in safe haven spots. it's not safe. they have no interest rates

wrchlt do you want the return? equities. >> ibm happens to be something that came out. there are going to be others. we saw it with some of the rails. csx was actually lower today. we will talk about select comfort later and say that's not a big deal? okay. stanley was a disaster. there are definitely warning signs. >> the biggest warning sign was taper still on the table. if we cleared all of these hurdles, it was going to be taper. >> so it's off the table until what? march? >> here is the way that they are going to look at this. they will do that. we will look at it as a one time charge. it's 15 days where part of the

government didn't function. >> you look through that completely. a retailer comes out and says business has not been good. >> fine. wait. if there is is a deal, if there's a deal, then they will look at that. >> what is your point on that? taper is more likely not to happen. >> which is good. right. but what we have on hand is potentially a weak earnings picture but it also is damage done to the economy. >> the economic data that we have had the economic impact right now if we can clear through this i believe that the other factors, there is really nothing back. >> one thing about confidence, it is not an indicator for

anything forward-looking. if you look at the overlay consumer kpon if i dense. which would be the worst print since late 2011. that was the buy signal. >> the company beating eps. about 40 minutes in now. the big issue, what cfo is talking about on the call right now the reason that they saw such bad hardware performance in china, he was talking to the sales team about execution is because china is developing a

new economic development plan. it will take a couple of quarters to adjust to that and get sales going again. the call you mentioned, china was down 22% because of a sales clause due to this economic development plan. leads me to that is is a big issue for them. software performing generally pretty well, but a little bit under expectations. which we saw come in under expectati expectations. >> thanks so much. >> this dove tails pretty nicely with the downgrade of cisco. reaffirming it through channel checks.

there are other names out there as well. the market has been saying one thing. i think some of these broaderic mickeyly sensitive names are saying something entirely different. i wouldn't be scared. i wouldn't be listening to ibm. if we look at the entire cycle there is big issues here. >> let's move on here. fincrlr. >> the banks are in the best shape i could remember. they built up capital enormously. the loan losses have come down

dramatically and the portfolios are in good shape. >> what did you make of the quarter? >> put it this way, bac is always compared to housing. all of these things are starting to clear. >> see, i think black stone is the most. obviously it's a different animal. and you have there is skeletons there. >> if we are off to the races, financials should be the place you want to be. >> i don't think that financials should be ridiculously cheap here. these guys blew yooefr quarter numbers. the bar was relatively low. as we talked about litigation issues, unlike jpm, have really cleared.

each quarter according to gap earnings, they have to pull more of their reserves out and drop them to the bottom line as some of the litigation stuff fades away. >> so you rotate out of financials and into what? >> this is the sweet spot for the global cyclicals, for the multinationals and basic materials in emergency. they have underperformed for two years. most of the rally has been in the banks and the consumer discretionaries.

we haven't yesterday had. if that is in the cards for the next two years, these stocks are screamingly cheap. >> all right. got to take a break here. ebay and american express both moving on earnings. we will give you updates from the ebay conference call. first the markets had a good day and positive debt deal news. what is next? is the damage already done? it's not just stocks. treasury auction taking place today. are there cracks in the debt market now? treasuries are going to have a hang overafter the dc deal.

>> did you use rem in the quad? >> in the yard at harvard. you're looking at a live shot at the senate floor. we could get a vote on the debt deal. we are all watching this. >> baited breath. >>ith baited breath. lots of >> investors to be critical. given, of course, the holiday shopping season. so perhaps a little managing of expectations. back over to you.

and you actually took home the trophy. >> for a change. i have been losing it all over the place. we talked about it. had trouble in 2005 and then had trouble a few times this year. we are looking for a miss. we didn't get a miss but the guidance was lousy. now what? >> the debt deal has pass ed to a lasting one.

>> it will have a negative impact on the banks this quarter as it pays more interest on deposits that it may not be able to lend. plus a similar situation deposits ballooning by $10 billion since quarter end as investors seek safety and certainty. >> did she say diters? >> it's a perfectly appropriate word. >> business leaders as well as the market. >> assume that they ever had any confidence. you have to stick with that premise in mind. i think now they will go back to ignoring congress. >> demand for u.s. treasury surging with one month has the

crisis been averted? it seems that as we push out the time lines, that is where there will be trouble in terms of the market. >> right now you have got a january t-bill that people are focusing on. the treasury secretary, his extraordinary measures -- it is -- it might actually be march? just like he had this time around. on the long end of the curve, some things are going on. you think about may 1, the entire street was qe infinity. we're going to taper in september? if you look at the bond funds,

those are 15% below their may highs. that means the long end of the bond curve have them -- >> you know, david said it yesterday. we had a dinner last night with richard fisher from the dallas fed. the damage that has been done, it's like we have been talking about consumer confidence earnings.

when i say people, pension funds and insurance companies. you know what? i was not thrilled with how over loaded i was to begin with. now i have an excuse to do something different. what if that accounts for that massive gab between where they were and where they have not recovered to. >> i would say if we just go 50% back to the old levels, it's still a return on bonds here. i think if you're up 20% going to the fourth quarter, i think it makes sense for the rest of the year. >> good to see you. time for pops and drops.

>> this was a disaster. then you had four analysts give you useless downgrades in the name. >> a pop here for mattell. >> this is a very good company. they have great products. i really don't see anything wrong with the story. >> the headline was buying 1400 outlets to boost its auto repair operations. >> pop for facebook. >> one of the stocks of the last couple months titled expectations high for third quarter.

>> a $40 million house in bell air with an unusual owner. robert frank has got more. >> thanks. the rich had lots of different chartable causes. some fight disease, some help the poor and some try to help super models. one wealthy homeowner is thinking of selling his mansion in part to help the models. let's take a look. >> he was really concerned about all different types of charities and people. he was concerned about water for third world countries, taking care of children and making sure they are well fed. and then he was super interested that models are well taken care of.

he visited many homes where models had to share a very small room. he wanted to make sure that models have a better way to live. >> now money alone won't buy this house. the owner says you have to have the right karma and be a good person with a lot of love for humanity. that includes super models. back to you. >> robert frank, thanks for that. >> you have tents? >> you don't want people trapsing through the house. >> you can't be popular forever. some are turning their backs. listen up nerds, now could be your time. the tax on the medical devices could have a big impact. that and much more coming up on fast.

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>> american express moving higher. >> amex is up slightly in the aftermarket. and on average kus mers spent about $4,037 in the quarter. >> all right. thank you very much. josh brown? does this mean anything for the consumer? the consumer is still spending

paying off their balances? >> american express is obviously the upper end of the consumer. >> additional spend, the rates are unbelievable. they are at all time lows. >> all right. let's move on. let's check in with josh lipton. josh? >> melissa, on the ebay conference call, the company cfo was just talking to analysts.

>> was the word shut down evoked? >> not yet. but i will hop back on and let you know if we hear that. >> macy's kicked it off. they were nervous. then walmart was a little hesitant. for me it's amazon. it has always been a favorite of mine. if you're going to worry about the retail sector.

>> none of them would get re-elected again. every time we come close to it, the mostly stable lower is two days and we have anywhere from a three to 15% rally. i say stay long it. you buy as you gradually come in. as long as we hold a 100 day i am bullish on market.

>> plus you have all the royalties on top of that from android, sam sung and so on. >> you had mentioned another name in your notes. it has been a monster we think it is the next pioneering. the reason we feel that way is we see 150% growth. the reason we feel that way is one of the companies who went public is ar. if you take their dry gas curve and you valuate at the same time, as a result we see about 150% production growth. like i said, these things have had tremendous moves. you don't just load up. you buy a little.

you keep your position if you want. and then as it rallies, i would add to it. >> it seems to be stuck in the mud right here. >> they are the biggest exposure there. that is why the stock has basically doubled over the last year. ♪ ♪ [ male announcer ] eeny, meeny, miny, go. ♪ ♪

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>> that's putting it lightly. get ready for a rough night's sleep. the stock is tanking, losing about a quarter of its value. earnings and profits both fell short of estimates. it cut its profit outlook. the whole thing as a portfolio has really taken the shares

down. >> so you have to mention it on the way down. you overlay the way stanley works. select comfort and you want to bring in some of the other names. and you wonder if this housing recovery that everybody talks about is as robust as the market has led you to believe. i would stay away. even down as much as it is. >> the banks told us that mortgage business was down 60% year-over-year.

>> and actually the three to four percent grows as you go down the curve because it's a tax on sales. it's not a tax on profits. so the company that is climbing the profitability curve is the one that hurt the most. >> in terms of, you know, the e rebates from governments and the medicaid program and drug costs hit to let's say a name like johnson and johnson. what sort of impacts could we be seeing as aca comes into full

effect? >> the good news is that all of these health care companies had to bite the bullet up front. >> will they see a benefit as the number of covered lives increases. as those new insured patients come through and they start going in for tests. that's the question that is still in front of us. i think investors are still assuming that the impact is modest and modestly beneficial but that's what is still in front of us. >> how do i play this does it

still have any gas left in the tank? >> i think it does. and i say that. so if you're look ing ing to -- would play down a more fundamental basis. pretty meaningfully. this is a number of names. you mentioned boston scientific but there is a whole list of names where fundamentals are actually starting to improve. so the reason why this group has done well this year is in part because we saw the bottom of fundamentals. and that's what is getting people's attention. >> all right. that will leave it there. thanks so much for joining us.

>> that's a big deal. you are in the great -- >> i went to great neck south high school. i'm not in the hall of fame. >> don't get mad at me. i would be careful, though. so let's not get too caught up in the trees, the forest is working. >> what would you do if you were running pepsi? warn buffet would not go the route of activist investor. >> if i owned pepsi, i would keep both -- they are both -- one of them is a terrific business and then there is is a perfectly good business. why break them up. >> up next the pepsi trade. stay tuned.

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>> this is is a live shot of the senate floor. a vote is expected to happen at any moment. any moment now there will be a vote. >> how are you. it's interesting. sometimes we try to look for unyule was value yum in calls or puts. we assume that that is bullish activity. there were three consumer names today that did have above average volume. another one was whole foods, another was pepsi and the other was green mountain coffee. green mountain coffee also up. how is that they are not

expecting the underlying strike to go through. sometimes you see a lot of call activity and you think it might be bullish. >> now mike yesterday we spoke about green mountain. would you be inclined to sell calls? >> the problem, of course, it can be very risky to short stocks. you face unthis is something that they really figured out with herbalife.

of the new k-cup machines that only take green mountain coffee k-cups. i think the jury is out on that. i would be inclined to lean in a bearish direction. >> no touch in your view. when david gets behind something, i thought this with ackman as well. he is a smart guy. if you have te marety -- >> i thought you were going to go in a whole other direction. let's stick with that. >> you get shorted. >> and check out our website. options action.cnbc.com. not so fast guy. our traders are quick but not always right.

>> nobody believes in it. valuation is ridiculous but that has been the latest with the last 30, 40, or $50. i think the stock can continue to go higher. >> that was bad. since the call the stock is down. >> i think it's worse than that. the citron group came out a couple of weeks later and said that they saw a $30 price target on it. i won't use the adjective you want. >> way to go. >> it still has to pass and get president obama's signature? and google set to report tomorrow. swre the trade you need to watch before your release straight ahead. [ male announcer ] once, there was a man

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>> here is a rapid fire recap of tonight's executive edge. >> we have tens of thousands of shipments held right now that we can't deliver to the u.s. government. >> in the eyes of the world, the men in washington all this week and that is is a gross understatement. >> i begin a series of conversations about a way to get the government reopened. >> i never had any intention of delaying the timing of this vote

and i thought it was interesting reading in the papers that much speculation about whether we might delay the timing of the vote, republican leadership never had. >> he believes it achieves what is necessary in terms of reopening the government and removing the threat of default. >> we are looked upon as the principled nation. we're willing to have a narrative about the debt ceiling and default. >> are there any real consequences. >> let me make the bigger point.

so bernanke care is really what we're concerned with these days. >> that's true. >> faith being the operative word here. at some point that becomes a problem and i think that some people are moving assets to the sidelines. >> i have a lot of interest in seeing the debt ceiling maybe even brought down. i think the government spending is out of hand. i think washington is the problem.

>> you get elected and you start running again. how can you do anything. at any moment we are expecting a vote. first move tomorrow when we come back. stay tuned. i am today by luck.

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just think of all the good washington has been obscuring. think of all the greatness so many of our executives deliver. something that shines through when politics steps out of the way and business gets to